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On Our New Pay Wall: Getting it Wrong

We are about to put up a pay wall on all of the Los Angeles News Group “Papers,” which is to say web sites. There will be limited free content but no more unlimited access.

I am confident that some very smart and well-informed business people have looked at this, studied it and after due consideration chosen this path. It is, of course (to follow the metaphor) a path that leads to a wall. In other words, it’s a dead end.

I believe this is exactly the wrong strategy and is doomed to failure. It is not that cliché that “information wants to be free on the internet.” Information doesn’t “want” anything. The problem is that information is free on the internet and is likely to remain so.

If you want to know what political folly is going on, it’s all over “free media:” TV, cable and the net. If you want sport scores or reports, ditto. A newspaper is no longer a delivery system for news. It is more and more about views, opinions and relationships. Most newspapers and their web sites have little that can be held hostage behind a pay wall.

In fact, I believe the strategists have it backwards. Instead of restricting visits, news web sites should be out promoting views. The trick is to get the click and drive traffic up. Ah, you ask, but where is the money? Good question. Just remember that newspapers were seldom made profitable by subscriptions. They were advertising vehicles. When the classifieds moved to the net, profits nose-dived. The industry response was to fire writers and editors and slim down the product. This has led to a death spiral. Fewer pages, fewer customers and much less revenue from advertising.

As advertising moved to the web, the news business had to follow. Now online revenue from advertising makes some money but next to nothing compared with the good old days of a decade ago. But the good old days are not coming back. We won’t see 47 billion bucks in print ads, and the 2 billion that now comes in from online won’t keep us in business.

Advertising can only increase on the net if more, not fewer, views come to us. Advertisers will not spend more money to reach fewer eyes. We should be promoting viewers and not driving them away. We should be establishing our sites as brands. The model is Huffington Post. Los Angeles News Group has a great brand to promote: Daily News. We are Dailynews.com. This is potentially a national, even international brand. Bring everyone to us as THE news portal. Then have the local and hyper-local links.

Our advertising problem is clear. When I write a piece with international ramifications, I get hits from all over the world. I’m pretty big in India, Pakistan and Mali (Really!). However, my page running a Gelson’s Market or Art’s Deli banner ad is of limited value in Pakistan. Although Deli as a meta-tag might draw Indian clicks.

You have focused on of the most critical business dilemmas of the 21 century. How to fund a free press? Who pays and how much? But readers paying for what they read is a future business trend and the only way to get it right is to experiment and refine the models as we learn more about the consumer’s behavior and perception of value. The NY Times and the HBR gives away 5 free articles a week/ month before you are asked to pay. Many other experiments are going on with web based only sites. The free market has never been free it just means that the freedom is there to attract money to the model that will sustain value in the long run for the consumer and the publisher. Look at the HPost model of no pay for most of the content for years. The good news is that your “voice” has a distinctive edge and intelligence which combined with your choice of topics should give you a growing international audience. Some outlets will pay over time and others will take longer to adapt. But quality writing and value to readers have proved to have staying power and in the long run will eventually generates economic value. The key is to stick around long enough for that to happen. My hope is that you will!!